Introduction
Demand for rentals remains high yet with increased regulation and other factors making the buy to let landscape less attractive for landlords, many are selling up driving lower supply. Research suggests landlords that have been in the game for longer are more likely to have a longer term view and ride out the invariable bumps in the road such as current higher interest rates. But what about landlords that might be feeling the pinch and maybe on the fence about whether to stay or go, could funded retrofit present an opportunity too good to pass up to upgrade properties and increase yields?
Retrofit is Coming: Opportunity or Threat?
The need to reduce carbon emissions across our housing stock is real. The governments roadmap shows this hitting the rental market in 2025 where the requirement to reduce carbon emissions will mean energy efficiency measures need to be installed in order to increase EPC ratings to at least a C rating to be able to set up new tenancies, extending to all existing tenancies in 2028.
This fact on its own would have the potential to see a mass exodus from the market but the fact there is government funding available to help pay in part or in full for energy efficiency work could soften the blow somewhat.
What Funding Is Available and What Will It Cover?
There are various funding schemes available, right now, all with different objectives and covering different energy efficiency measures. Some have a distinct focus on one particular energy efficiency measure, such as insulation, whilst others are more concerned with raised EPC bands, irrespective of the measures installed.
There is significant funding for all kinds of eco measures targeting energy efficiency, reducing energy usage and helping make energy more affordable for tenants.
The funding market is complex and finding the right funding package for a particular use case isn’t as straight forward as doing a quick Google search. We set up Optify to help find the optimal funding packages available, designed specifically for the requirements of the property, the occupants and the complex eligibility criteria of the funding schemes with the key objective of helping you maximise the amount of funding you could claim.
The process for establishing eligibility looks at the characteristics of the property and the circumstances of the tenant. Not all will be eligible for funding but the scope of the funding schemes is vast and funding will help a significant number.
Benefits of Retrofitting Now
The fact there is funding available now to take action that will become mandatory in 2025 is a big opportunity.
With living standards and energy costs two big subjects still relevant in the market, undertaking funded work to your properties to help on both of these scores may be a no brainer. Energy efficiency works will make your properties warmer and healthier for tenants, help with their energy costs and drive better value in your property. With evidence that tenants value these characteristics in a new home, even in a busy market, you’d be doing yourself no harm in differentiating your properties, maybe helping to secure the highest paying tenants.
Tenants of course expect hassle-free living. Energy efficient properties often require less maintenance, translating to fewer disruptions and inconveniences for your tenants and less maintenance overhead for you.
Considerations
If you’re thinking that upgrading your properties now is a good move, get in touch with us. We can help navigate the funding element of the project and critically help you optimise the funding you could get. It’s important to engage with us right at the start before you get any funding of your own or get quotes from trades in order that we can assess the project end to end and therefore get you the best deal.
Conclusion
The UK's strong rental market, whilst challenging, also offers exciting opportunities for landlords. To capitalise on this, prioritize energy efficient property improvements. By enhancing tenant satisfaction, you'll not only reduce turnover but also ensure that your property is the preferred choice among discerning renters.
If you’re ready to make your properties more energy efficient and tenant friendly in this high demand market, get in touch to explore eligibility. Your tenants will thank you, and your rental business can continue to thrive, long into the future.